Exhibition of Goods: Exhibition of goods is simply DISPLAY of goods at a trade fair or any other occasion with the intention to promote business and enhance customer base and sales.
As per CGST Act, any business activity or transaction is considered as SUPPLY only if:
Except in case of activities mentioned in schedule 1 of the act.
Activities which are specified under schedule 1:
Provided that gifts by an employer to employee up to Rs.50,000 shall NOT be treated as supply.
a) by principal to agent where the agent undertakes to supply such goods on behalf of principal, or
b) by agent to principal where the agent undertakes to receive such goods on behalf of principal
Hence, goods sent for exhibition, other than those mentioned in schedule 1, are NOT considered as supply, as initially there is no CONSIDERATION.
Also goods sent exhibition outside INDIA are NOT considered as “ZERO-RATED-SUPPLY” because a supply is considered as Zero rated supply only if:
But goods sent for exhibition are not even considered as supply of goods due to lack of consideration, then how it will even be categorised under zero rated supply.
But goods sent for exhibition may consider as supply in following cases:
In both the cases stated above, the person sending goods required to issue a TAX INVOICE:
Registration Requirement
Format for Records
There is specific format under which records shall be maintained for the goods sent for the purpose of exhibition.
Folio no. / reference no. |
Description of
|
Quantity units |
Value per unit |
Total value of goods |
Date of removal from place of business |
Delivery challan |
Shipmentbill |
Details of goods supplied (i.e. specified goods not brought back) |
Invoice no and date |
Derails of specified
|
Bill of entry no and date |
||||||
Date |
No. |
Date |
No. |
Date |
No. |
Date |
No. |
Date |
No. |
Date |
No. |
||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
15 |
16 |
17 |
18 |
Delivery Challan
Since, goods sent for exhibition are considered as “sale on approval” basis, so they constitute sales only when it is approved by customer/. Thus, at the time of removal of goods for exhibition a “DELIVERY CHALLAN” is required to be sent along with the goods. Delivery challan is mandatory for the movement of goods for exhibition.
Three copies of delivery challan should be prepared:
Delivery challan shall contain following details:
But when goods are sold or deemed to be sold then supplier needs to issue TAX INVOICE.
REFUND
When the goods sent for exhibition is sold or deemed to be sold then supplier of such goods is eligible to claim ITC in respect of such goods or Refund of ITC in case of ZERO RATED SUPPLY i.e. when goods are sent for exhibition to special economic zone or outside India.
Since at the time of sending goods for exhibition outside India, such goods were not categorised under zero rated supply, that means bond or letter of undertaking i.e. LUT were also not issued which is required for claiming refund of ITC. But it is clarified that, even if sender did not execute bond or LUT, he shall be eligible for refund in accordance with section 54(3) read along with rule 89(4) of CGST Rules.
FAQ’s
Q1: Can we claim input on GST paid on exhibition expenses such as expenses on stall, tables, chairs etc.?
A: Yes, they are considered as marketing expenses which is related to business. Hence, ITC can be claimed on such expense.
Q2: Is E-way bill required for sending goods for exhibition?
A: Yes, if such exhibition takes place out of state or out of country in which supplier is registered.
******
The author can be however contacted for further clarification at 9654182791 or via mail at caajay92@gmail.com
DISCLAIMER:- This Blog is for the purposes of information / knowledge and shall not be treated as solicitation in any manner or of for any other purposes whatsoever